I’ve owned Apple
/quotes/zigman/68270/delayed/quotes/zigman/68270/lastsaleAAPL since March 2003 from a split-adjusted $1 per share. Having bet my reputation on being a longtime Apple bull in the public eye, I’d be foolish not to recognize what Apple has done for my career. But let’s imagine just how many transformative companies Apple could easily acquire.

In a fascinating article last week, Eric Jackson argued that Apple’s Tim Cook had made a mistake by not using the $100 billion in cash that’s he’s used for stock buybacks and dividends over the last of couple years would have been better used acquiring Tesla, Twitter and Pinterest, and ramping up spending R&D by another $20 billion. But that’s rearview mirror, and the fact is that Apple’s got $155 billion in cash on the books right now and it will generate nearly $70 billion in free cash flow this year. But that’s not the full story because Apple could also take advantage of its stock’s all-time highs here and use that gargantuan market cap to do most of its M&A work for it.

When Facebook
/quotes/zigman/9962609/delayed/quotes/zigman/9962609/lastsaleFB has done its huge acquisitions of WhatsApp, Oculus Rift and Instagram, it’s used stock for about 75% of the deal and 25% cash. Apple used $2.6 billion in cash and another $400 million in stock to buy Beats. Why not structure these deals in a similar fashion, with Apple using 50%-60% stock and 40%-50% cash structures to get them done?

Here are the top 5 companies Apple should acquire immediately using its stock and maybe a few dozen of its billions in cash and why.

5. SanDisk/quotes/zigman/54370/delayed/quotes/zigman/54370/lastsaleSNDK — Apple would secure the top-tier flash memory supplier and patent-holder in the world, and could immediately separate its mobile devices and PCs by providing double or triple the memory available on competing devices and computers. Cost: $30 billion including a premium to today’s Sandisk valuation of $22 billion.

4. Hulu — This privately-held TV shows and movies streamer that competes directly with Netflix has been struggling and Apple could probably snatch this sucker up on the cheap and drastically improve its own AppleTV offerings while removing a threat. Cost: $2 billion – $3 billion.

2. Garmin/quotes/zigman/118648/delayed/quotes/zigman/118648/lastsaleGRMN — I still dread my Apple maps and always try to use Google Maps app instead. Enough with second-best in-house development efforts, Apple needs to just buy Garmin and their GPS systems and get it fully integrated and be done with it already. Cost: $15 billion.

1. ARM Holdings/quotes/zigman/67211/delayed/quotes/zigman/67211/lastsaleARMH — Apple designs its own chips but they’re based on the ARM Holdings patents as are most of the major mobile phone chips used these days. Anti-trust issues might keep this deal from ever becoming a reality too, but imagine how far ahead of the competition Apple would be if they owned Arm Holding outright. Cost $30 billion.

The logic behind an Apple for Tesla deal would be that both make hardware and are best of class. Apple moving from PCs to mobile devices made sense. Apple moving from mobile devices into cars doesn’t make much sense. That said, I do think Twitter’s a potential M&A target at its current valuation. If WhatsApp is worth $19 billion to Facebook and Snapchat is currently worth $15 billion or so in the private market, then it does seem that Twitter would be in a lot of big tech companies’ cross hairs. I don’t think Apple would ever buy Twitter, but Facebook or Microsoft or even Disney or Comcast types could. Yahoo too perhaps, but it’d have to be a 50/50 merger there by the time the deal would get done and I don’t think Yahoo’s board would be willing to do that.

Here’s a good podcast on this topic of Apple acquisition ideas below. Think I’m nuts? Join the deep dive discussion we’ve having about this over on Scutify.

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About The Cody Word

Cody Willard writes the Revolution Investing investment newsletter for MarketWatch and posts the trades from his personal account at TradingWithCody.com He is the founder of WallStreetAll-Stars.com and the principal of CL Willard Capital. Cody serves as an adjunct professor at Seton Hall University and is on the University of New Mexico Alumni Board. He was an anchor on the Fox Business Network, where he was the co-host of the long-time #1-rated show on the network, Fox Business Happy Hour. Cody, a former hedge fund manager, and his stock picks and economic outlooks have been featured on NBC’s The Tonight Show with Jay Leno, ABC’s 20/20, CBS Evening News, CNBC’s SquawkBox, Jon Stewart’s The Daily Show, as well as in the Financial Times, Wall Street Journal, New York Times, and many other outlets.